Sam Bankman-Fried Leverages Law Firm Advice for FTX Fraud Defense
Sam Bankman-Fried, the disgraced founder of cryptocurrency exchange FTX, is preparing to argue that he relied on the advice of Silicon Valley law firm Fenwick & West in his defense against fraud charges.
On Tuesday, his lawyers requested that prosecutors turn over documents that were provided to the government by the California-based firm between 2017 and 2022, according to a report by Bloomberg.
Bankman-Fried's defense team reportedly claimed the legal advice by Fenwick & West is “material to preparing a defense."
If the government does not comply with the request, the lawyers are seeking permission to subpoena the firm.
The legal advice Fenwick & West provided is said to include the use of encrypted messaging apps, multimillion-dollar loans to FTX executives, and the exchange's compliance with US banking regulations, all of which are key elements of the charges against Bankman-Fried.
Bankman-Fried is accused of directing a yearslong fraud in which he allegedly used billions of dollars in FTX customer funds for risky investments, personal expenses, and political donations.
However, a so-called advice-of-counsel defense could be used to rebut suggestions that Bankman-Fried intended to break the law.
“In other words, the defendant’s argument is ‘my lawyers told me it was legal, and I thought it was legal,’” New York University law Professor Stephen Gillers said.
Bankman-Fried's request for documents has placed further scrutiny on the relationship between FTX and Fenwick & West.
The firm represented Alameda Research, FTX's hedge fund affiliate and the conduit for much of Bankman-Fried's fraud, in 2017 and became FTX's main outside counsel after its founding in 2019.
Fenwick & West has been sent subpoenas by law enforcement
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